Carnival loses $ 2.8 billion but posts strong bookings in 2022

Carnival Corp. lost $ 2.8 billion in the third quarter, but shares rose on Friday after the cruise line said bookings for the second half of next year were above 2019 levels.

Investors on cruise are looking for a silver lining for an industry that has been battered by the pandemic.

Still, the short-term outlook remains bleak. Carnival said the increase in COVID-19 cases in the United States due to the delta variant had hurt sales this summer. Rivals Royal Caribbean and Norwegian Cruise Line saw the same. Newly reported virus cases tend to drop slightly now.

Carnival said the average ship was only 59% full in August, but that was an improvement from 39% in June, and that the trips generated enough revenue to cover the costs. cash costs.

“We reported a significant loss so we haven’t recovered yet, obviously, but looking ahead we see better days,” CEO Arnold Donald said in an interview. “If things continue to evolve as they are [with COVID-19 cases], we should see positive cash flow as our fleet sails broadly again. “

Although there were fewer passengers, they spent 20% more on board than before the pandemic, the company said. Donald said there could be several explanations.

“People haven’t been able to take a cruise – maybe not even travel – for a while, so they’re in the mood to spend more because they haven’t had a chance in a while.” , did he declare.

Carnival, headquartered in Miami but incorporated in Panama, said after write-downs its adjusted loss was $ 1.99 billion in the third quarter, ended Aug.31.

Eight of Carnival’s nine cruise lines, including Carnival, Princess and Holland America, have resumed sailing with reduced schedules. The company said it expects more than half of its fleet to be operational by the end of October and the entire fleet by next summer.

The cruise industry has been among the hardest hit by the pandemic. The Big Three cruise lines are incorporated outside of the United States and have not received the same type of federal relief that is given to airlines. With incomes at their lowest, companies borrowed billions to avoid sinking.

Carnival shares rose 3% to close at $ 25.44.

– By David Koenig